In a research note by the JPM Commodities Research team late said global observable oil inventories continue to record strong draws in July.
“Global observable oil inventories (crude and products) drew by 18 million barrels in the second week of July, driven by a 30 million barrel draw in crude while product inventories built by 12 million barrels,” the analysts stated in the research note.
“Through the first two weeks of July, global observable oil inventories have drawn by 32 million barrels, more than three times faster than our implied balances show for the month,” they added. “The acceleration is likely helping to offset our miss in June, where oil inventories built by 19 million barrels vs an implied draw of 31 million barrels,” the analysts went on to state. In the note, the J.P. Morgan analysts highlighted that, “reported visible OECD commercial oil stocks (U.S., Europe, Japan, and Singapore) … reported a slight build of two million barrels during the second week of July”. The analysts stated that an outsized build of 15 million barrels in U.S. products, driven by travel disruption from hurricane Beryl, offset draws that occurred in every other reported figure for the week. “Despite the build, reported OECD inventories are now fully aligned with our implied OECD commercial oil inventories for the month of July,” the analysts went on to state.
In a research note on July 10, J.P. Morgan analysts said global observable oil inventories drew by four million barrels in the first week of July, “with an eight million barrel draw in crude somewhat offset by a four million barrel build in products”. “Within the crude draw, the U.S. and China were responsible for a combined 19 million barrel draw in the first week of July,” the analysts said in that note. Also in that note, the J.P. Morgan analysts revealed that, “reported visible OECD commercial oil stocks (U.S., Europe, Japan and Singapore) … built by six million barrels in the first week of July”. “By split, crude oil inventories built by three million barrels while products built by an additional three million barrels, countering our expectations of stock draws continuing throughout July,” the analysts added. “While this is only the first week of reported data for the month, sizeable crude builds of 4.2 million barrels in Japan and a U.S. product build of six million barrels drove a majority of the overall build across reported OECD oil inventories,” they continued. In this note, the J.P. Morgan analysts said that, “despite draws starting to materialize in weekly inventory data, overall June oil inventory stock changes reflect mixed results”. “For the month of June, OECD commercial oil stocks drew by 14 million barrels, in line with our expectations of a 13 million barrel draw,” they added. “Meanwhile, global observable oil inventories built by 11 million barrels vs our expectations of a 34 million barrel draw, largely driven by Chinese re-stocking of 26 million barrels,” they went on to state. In a note on June 26, J.P. Morgan analysts noted that global observable oil inventories drew by 27 million barrels in the third week of June, “turning June’s total stock change to a net 2.5 million barrel draw through three weeks of reported data”. “By split, global crude stocks declined by 29 million barrels week over week last week, while product inventories built by two million barrels. Global crude oil inventories have drawn by a combined 64 million barrels since April, in line with our expectations of global refinery runs increasing by 3.5 million barrels per day from April through August,” they added. “With that, global oil stocks have now fully aligned with our implied balances for June,” they went on to note. The J.P. Morgan analysts highlighted in that research note that OECD commercial oil inventories continued to run above their implied balances, “the majority of that in the United States”. “Reported visible OECD commercial oil stocks (U.S., Europe, Japan and Singapore) built by 6.9 million barrels in the third week of June, as U.S. oil inventories swelled by 8.2 million barrels and now sit at the highest level since February 2021,” they added. “U.S. Gulf Coast accounted for about 40 percent of the build, with crude exports falling by 500,000 barrels per day week over week, impacted by the storm [tropical storm Alberto],” they continued.